The second part of the government's Help to Buy scheme was rolled out early, in October 2013.

Aimed at both first time buyers and existing property owners looking to move, it part-guarantees new mortgages to encourage banks to help prospective borrowers without a big deposit get on the ladder.

What's changed?

The government's Help to Buy mortgage scheme was scheduled for launch in January 2014, but the start date was brought forward.

Help to Buy mortgages have now be available since 8th October 2013, meaning prospective buyers were able to get government help to buy a property three months earlier.

Despite the early launch, the scheme is still set to run until January 2017 although the Bank of England will have the power to curb it if they believe it's creating a property bubble.

Of course, the 'equity loans' part of Help to Buy has been in place and active since April this year - read our guide: Help to Buy Mortgage Scheme Explained to find out how it can help.

So what does this mean for you?

The sole aim of the Help to Buy mortgage guarantee scheme is to get the property market moving.

At the moment it's difficult to get a mortgage if you don't have a big deposit but Help to Buy should change that.

Through the scheme the government offers guarantees of up to 15% of a property's value to encourage lenders to grant mortgages to people they'd ordinarily refuse. The hope is that with less risk to the lender's money, they'll extend more mortgages to more people who can then move up the property ladder.

The terms of the Help to Buy mortgage guarantee scheme are:

  • You can buy a house with a 5% - 20% deposit and get a Help to Buy mortgage of up to 95%

  • Up to 15% of the house price will be guaranteed by the government and your lender

  • Help to Buy mortgages will be available to first time buyers and existing homeowners that want to move up the ladder

  • The mortgage guarantees will be available on both new builds and older properties worth up to 600,000

Which lenders will offer 95% Help to Buy mortgages?

Only a few banks are signed up so far, such as Halifax, RBS, NatWest, Bank of Scotland and Aldermore so you may need to wait a bit longer if you want more choice.

For a full list of all lenders in the scheme go to the Help To Buy website.

Apply direct to the lender to use the scheme; they will carry out affordability checks (as usual) to ensure you can afford a Help to Buy mortgage although there is nominally no minimum income required.

Importantly, you won't be able to use Help to Buy with any other publicly funded mortgage scheme or for an interest-only mortgage.

Help to Buy mortgage guarantees

Help to Buy mortgage guarantees have been available since January 2014.

However, at the start at least, Help to Buy mortgages and mortgage guarantees will only be available via certain lenders.

The government anticipates that many more will join the scheme, but there's no knowing how competitive they're rates will be.

This means you'll need to compare the Help to Buy mortgage deals on offer with other 80% - 95% mortgages to see which works out cheapest and most accessible given the deposit you can put down. You'll also need to take any Help to Buy fee into consideration once this is confirmed.

While there is no minimum income threshold to be eligible for the scheme, you will have to meet the lender's application criteria and pass a 'financial stress test' and meet the Financial Conduct Authority's impaired credit standards before you'll be able to borrow.

One thing is for certain: you can't use a Help to Buy mortgage to purchase a buy-to-let property or a second home (whether you live in it full, part or none of the time).

We'll update this guide with more information as soon as it becomes available.